® SCC Online We Eston, € 2021 EBC Pubehing Pvt. Li SCC RES Printed For: ARVAN ANAND, SCC Onfne MYLOFT Remote Accass TERETE 866 ontine wed Extion: nto:itwmw-sccontine.com (© 2021 Eastem Book Company. (1999) 4 Supreme Court Cases 327 : 1999 SCC OnLine SC 488 (BEFORE S. RAJENDRA BABU AND S.N. PHUKAN, JJ.) OIL & NATURAL GAS COMMISSION . . Appellant; Versus M.C. CLELLAND ENGINEERS S.A. . . Respondent. Civil Appeal No. 932 of 19912, decided on April 23, 1999 A. Arbitration — Generally — Interest — Interest on interest — Powers of arbitrator regarding grant of — Claim made for balance payment as well as interest thereon — Arbitrator awarding interest under both heads — Interest on the amount of interest may be termed as interest on damages or compensation for Hage delayed payment — Such damages or compensation would become part of the principal — Thus S. 3 Of the Interest Act, 1978, disallowing interest on interest would not have any relevance in the context of the matter — Arbitrator had the power to grant interest on the interest amount — Held, Division Bench of High Court rightly dismissed the appeal against the order making such award rule of court — Interest Act, 1978, S. 3 — Arbitration Act, 1940, Ss. 14 & 29 — Civil Procedure Code, 1908, 8.34 (Para 4) B. Practice and Procedure — Pleadings — Insufficiency of — When no foundation has been laid in the course of the proceedings before the arbitrators either in the pleading or in the evidence, the matter cannot be examined by the Supreme Court — Held, on facts, plea regarding bar of limitation was a bald statement without details and could not be entertained by the Supreme Court — Limitation — Generally — Pleading regarding bar of — Must be sufficient and must include adequate detail — Arbitration Act, 1940, S. 37 — New plea — Plea not adequately pleaded earlier — Sought to be elaborated before Supreme Court (Para 5) (Para 3) A-M/7/21051/C Advocates who appeared in this case: B, Datta, Senior Advocate (R.K. Joshi and Sushil Kumar Jain, Advocates, with him) for the Appellant; E.C, Agarwala, Advocate, for the Respondent. The Judgment of the Court was delivered by 'S. RAJENDRA BABU, J.— This appeal arises out of certain arbitration proceedings between the parties to this appeal resulting in an award made on 29-2-1988. The arbitrators by their award directed that the appellant shall pay to the respondent as follows: “(US $ 1004.50 being interest on US $ 40,102.97 at 12% p.a. from 10-12-1985 to 16-4-1986, (ii) US $ 59,583 being interest on US $ 3,12,011.00 at 12% p.a. from 3-5-1983 to 5-11-1984.” 2. On these two items of claim the arbitrators also awarded interest at 12% per{© SCC Ontine Web Eston, © 2021 EBC Publishing Pt. Ld SCC’ Snes Printed For: ARVAN ANAND, SCC Onfne MYLOFT Remote Accass TERETE 866 ontine wed Exton: ntositwmw-sccontine.com (© 2021 Eastem Book Company. annum from the date of award till realisation. The award so made by the arbitrators was filed in the court. Objections filed thereto stood dismissed and decree was passed in terms of the award. Against that order made by the learned Single Judge in his original jurisdiction an appeal was carried to a Division Bench which also stood dismissed. Hence this appeal. 3. Shri B. Datta, learned Senior Counsel for the appellant contended that what was awarded by the arbitrators in respect of the two claims referred to earlier in the course of this order is itself interest for different periods. He, therefore, submitted that the arbitrators could not have further awarded interest on the claims awarded at 12% per annum from the date of award till realisation. He did not dispute, and very fairly and correctly, that the arbitrators do have the power to grant interest on the amount claimed in the arbitration and the power of the arbitrators was very characteristically described by him as “before, during and after” of the arbitration proceedings. WB Poses 338 His point is that there cannot be interest upon interest when the claim itself is one of interest and interest upon that amount could not have been granted by the arbitrators and relied upon Section 3 of the Interest Act, 1978. 4, There cannot be any doubt that the arbitrators have powers to grant interest akin to Section 34 of the CPC which is the power of the court in view of Section 29 of the Arbitration Act, 1940. It is clear that interest is not granted upon interest awarded but upon the claim made. The claim made in the proceedings is under two heads — one is the balance of amount claimed under invoices and letter dated 10-2-1981 and the amount certified and paid by the appellant and the second is the interest on delayed payment. That is how the claim for interest on delayed payment stood crystallized by the time the claim was filed before the arbitrators. Therefore, the power of the arbitrators to grant interest on the amount of interest which may, in other words, be termed as interest on damages or compensation for delayed payment which would also become part of the principal. If that is the correct position in law, we do not think that Section 3 of the Interest Act has any relevance in the context of the matter which we are dealing with in the present case. Therefore, the first contention raised by Shr Datta, though interesting, deserves to be and is rejected. 5. The next contention urged by Shri Datta is that the claim made by the appellant for interest on the alleged delayed payments made by the respondent is barred by the law of limitation. It is pointed out that the award itself notices that the claimants cannot lose their right to interest due on the next delayed payment at the end of the three years per each due date the claim would be barred and that principle was not applied on the delayed payment for the period from 3-5-1983 to 5-11-1984. On this aspect of the matter we may notice the pleading raised before the arbitrators. It is stated in para 10(a) as follows: “The present arbitration itself is barred by limitation as the alleged claims are relating to the work done in 1981-82.” This is a very bald statement without setting out the details as to how the claim made by the respondent before the arbitrators have become barred by the limitation particularly when the stand of the respondent is that they had running bills and Payments were made from time to time and an account has to be taken as to what amount becomes due and when; the same has to be worked out. Whether all such details have to be worked out and whether the transactions between the appellant and the respondent did not become complete until the payment of final amount are© $0 Onine Wad Eston, © 2021 EBC Publishing Put Ld SCC’ Sesame Printed For: ARVAN ANAND, SCC Onfne MYLOFT Remote Accass TERETE 866 ontine wed Exton: ntositwmw-sccontine.com (© 2021 Easter Book Compa Pa et tag rt pany. matters for adjudication. Thus, it becomes very difficult to appreciate that the plea raised before the arbitrators was sufficient to meet the situation to defeat the claim on the bar of limitation. Therefore, we do not think that we can examine the matter in the light suggested now by the learned Senior Counsel for the appellant when no foundation has been laid in the course of the proceedings before the arbitrators either in the pleadings or in the evidence. We are, therefore, of the \D Page: 330 view that the High Court was justified in dismissing the appeal against the decree passed in terms of the award. 6. The appeal, therefore, stands dismissed. However, in the circumstances of the case, there shall be no order as to costs. " From the Judgment and Order dated 25-10-1988 of the Bombay High Court in A. No. 1253 of 1988 any mistakes ar smission, this cacence) Reacnate/ Judgment) act rae) regulation) rear